"History repeats itself, first as tragedy, second as farce", said Marx. And so, amid the crisis in Greece, there emerges an openly neo-Nazi party that polls sufficient support to enter parliament, before denying that gas chambers ever existed and ejecting journalists from its press conference for showing its leader insufficient respect.

But putting Greece to one side, there is a broader school of thought that views recent political developments in Europe as anything but a farce. Yesterday the deputy prime minister, Nick Clegg, attracted attention after suggesting that the combination of economic insecurity and political paralysis that has accompanied the eurozone crisis is providing "an ideal recipe for an increase in extremism and xenophobia". Like others, Clegg has linked the post-2008 global financial and eurozone crises with rising public support for extremists.

The argument goes something like this: the withdrawal of Greece from the euro may spark a "domino effect", pushing Italy and Spain toward a similar exit and – as resources become increasingly scarce – cultivate a fertile breeding ground for charismatic extremists who claim mainstream politicians are to blame for the crisis, and that immigrant and minority groups are taking all of the jobs and social housing. Before too long – some fear – the European political landscape will be littered with neo-Nazi and anti-system parties. Seemingly forgetting the past 60 years, Europe will slide back into the well of nazism and xenophobia.

But there are three reasons why this argument needs modifying.

The first is that extremist parties (particularly on the right) actually commenced their electoral ascent well before the financial and eurozone crises. Throughout the 1980s and 1990s, anti-immigrant and anti-establishment parties – such as the Austrian Freedom party or the Flemish Block – were rallying votes during periods of economic stability and growth, not recession.

Furthermore their supporters were not those on the very bottom step of economic ladder. Rather than the unemployed, they tended to be blue-collar workers and members of the lower middle-classes who were in employment, but who felt threatened by globalisation and the onset of mass immigration. The tendency to ignore this longer-term trend was perhaps best evident in coverage of the French presidential elections, much of which directly linked support for Marine Le Pen to the eurozone crisis. The reality, however, was that her father had been winning impressive levels of support since the mid-1980s, and achieved his strongest performance in 2002, a period that economically was like a distant planet compared to where we are today.

The second reason concerns the types of extremist parties that have prospered in Europe. The entrance of Golden Dawn into the national parliament in Greece has sparked widespread concern about the return of nazism. But, again, the reality is rather different. As academic studies have repeatedly shown, the types of extremist parties that prosper in Europe are not those that cling to the central features of neo-nazism, such as biological racism, antisemitism and hostility toward liberal democracy. Rather, it has been parties that acknowledge that these ideas are socially unacceptable to the mainstream majority, and so have achieved success only by removing themselves from the legacy of interwar Europe. The rise of Golden Dawn was a by-product of desperate protest, not an ideological endorsement of nazism. This is an important distinction, as the volatile nature of its support means a protest party is distinctly unlikely to sustain a major challenge to the dominant parties.

And when we look to the countries that some fear may suffer the same fate as Greece – Italy and Spain – there is no neo-Nazi movement waiting in the wings. The extreme rightwing Platform for Catalonia in Spain has enjoyed limited local success, but this is not the National Socialist party mark two. Meanwhile, in Italy former fascists such as Gianfranco Fini have only been allowed into the corridors of power because of their renunciation of Mussolini and antisemitism.

The third is rooted in the underlying drivers of support for these parties. Perhaps the most popular conventional wisdom about the rise of extremist parties is that they stem simply from our concerns over jobs and social housing. The argument is rooted in an older assumption that citizens who backed Hitler did so in order to protect their assets from communists, and more recent thinking in the study of politics that views voters as narrow, rational creatures who only vote to improve their material wellbeing (so-called "rational choice theory").

But the conventional wisdom is wrong. Yes, concerns over scarce resources matter. But concerns over national culture, identity and ways of life matter more. Across Europe, and from the 1990s onward, there is now a large body of (convincing) research that those who support extremist parties at the extremes of the spectrum are motivated foremost by their perception that the cultural unity of their community, the identity of their native group and their overall way of life is under threat from immigration and – increasingly – Islam. Large numbers of citizens felt this way before they had even heard the words "credit crunch".

The eurozone crisis may have contributed to a fertile breeding ground for these parties, but let's not kid ourselves: populist extremists were already operating amid a perfect storm, and one that is unlikely to pass. Immigration, public anxiety over the compatibility of Islam, weakening bonds between voters and mainstream parties, and historically high levels of political disengagement and distrust have created new opportunities for parties that are distancing themselves and their discourse from interwar fascism.

So how should mainstream parties respond? Perhaps the key challenge is countering these feelings of cultural (as opposed to just economic) threat. Mainstream politicians tend only to make the economic case for immigration and rising diversity, rather than underscore the cultural contribution that immigrant and minority groups make to our national life. This is why arguments over net immigration or the allocation of jobs are unlikely to resonate over the longer term. Aside from exploring more innovative ways of addressing cultural anxieties, there are also too few voices in modern politics countering the claim by extremists that Muslims pose a specific threat to values and national cultures.

These claims are false, and are undermined by a large body of evidence that demonstrates how – contrary to the claims of far-right extremists – the vast majority of Muslims (in Britain and elsewhere) identify strongly with their respective nation state and renounce violence. Large majorities also reject practices such as honour killings and the grooming of white girls, but at present too few voices from the responsible centre are countering stories that suggest the opposite.